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Power Lunch

News/Business. Sue Herera, Tyler Mathisen. Today's news on the economy, markets, real estate, media and technology. New. (CC)

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Us 16, Nike 7, S&p 7, Obama 6, U.s. 6, Ford 6, Boeing 6, Europe 5, China 5, Kathleen Sebelius 4, America 4, Sebelius 3, Michele Snyder 3, Jeremy Stein 3, Patrick 3, New York 3, Mandy 3, Larry Fink 3, Aetna 3, Usaa 3,
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  CNBC    Power Lunch    News/Business. Sue Herera, Tyler Mathisen. Today's news on  
   the economy, markets, real estate, media and technology....  

    October 30, 2013
    1:00 - 2:01pm EDT  

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digest. >> i'm still bear on this. i think there's limited upside. i will take ge my final trade. >> weiss, i sold ul, stick with american. >> wow. big sellers. soda stream, facebook. >> it was a trade. >> mur if. >> buy xom. >> health net, hnt. >> power begins now. >> "halftime" is over, the second half of your trading day begins now. >> scott, gentlemen, thank you very much. three main stories we're following at this hour. of course the markets at or near record levels. the other one, the obama care mess. this lady on the hot seat. congress questioning health and human services secretary kathleen sebelius. if you missed the hearing it's safe to say that this was not the secretary's best day. and among other things, we're looking at is how obama care could change your employer sponsored plan. we're getting new details today as annual enrollment season approaches for many of the plans.
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then, now i can move over here, there is sue, the it fed, decision time, one hour away and where does america stand on job creation? it's critical, obviously, to the fed and to the economy. adp number out this morning, not so great. let's check in with you at the nyse. >> you're absolutely right, and we will get to that but we want to start, ty, with the fireworks on capitol hill as kathleen sebelius goes before the house energy and commerce committee. bertha coombs is on the case on capitol hill. over to you, bertha. >> sue, the hearing lasting more than three and a half hours and members of congress usually a little more def ren shall to a cab meth member but they did hit secretary kathleen sebelius hard on a number of issues. she started out by apologizing and taking responsibility for the website nurse and it's improving every day. clearly there have not been enough but she said none of the contractors who said they raised red flags said the problems warranted delaying the october 1st rollout.
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when pressed by congresswoman marcia blackburn about some of those critical late decisions that may have contributed to the failures and who made them in her staff sebelius said ultimately the buck stopped with her. >> i'm not pointing fingers at verizon. i'm trying to explain the way the site operates. we own the site. the site has had serious problems. >> who is in charge, madam secretary? >> the person now in charge as an integrate are is qssi one of our -- >> who was in charge as it was being built. >> cmst was in charge -- >> at that time who is the individual -- >> michele snyder. >> michele snyder is the one responsible for this debacle? >> well, excuse me, congresswoman, michele snyder is not responsible for the debacle. hold me accountable for the debacle. i'm responsible. >> she also defended the issue a number of congress people holding up people letters from their constituents saying their
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plans have been canceled because of the aca, she defended the president on that fact, that if you like your plan you can keep it, saying that it was the insurer's decision not to keep those grandfathered plans and would not give numbers on enrollment. one of the things that committee members have asked her to bring to this hearing when pressed by lee terry of nebraska, she said it's because of the system problems she doesn't trust the data. >> that data out there exists. >> sir, i would tell you right now, it is not reliable data, according to the insurance companies who are eager to have customers, they are not getting reliable data all the way through the system. >> sebelius says they are working on improving that data on the back end of the systems. those reports that go to the insurers. she also could not say when the website was going to be coming back today. guys, even as she was on the stand today, testifying, it has been down today for technical issues. back to you. >> all right. thank you very much. bertha coombs reporting for us.
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now to scott cohen, open enrollment is approaching for many corporate plans, including our own here at comcast, nbc universal. how will obama care change things this year and downstream for people who are accustomed to their corporate plans? >> it's changing things, but things were already changing. that's the bottom line here. this is our nbc universal open enrollment guide which came out and the first thing they tell us, costs are rising. turns out for us anyway they really are rising and some cases up as much as 25%, depending on the coverage, higher deductibles as well. they tell us this is because more of us are using health care and federally mandated health care changes will require comcast nbc universal to pay new fees and implement plan design changes. we're seeing a lot of that in materials going out in recent days across corporate america. costs are up and the affordable care act listed as one of the reasons. insurance companies like aetna,
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one of the providers here, say they are passing their costs on to employers. >> aetna alone will pass through to its customers over a billion colors worth of taxes and fees associated with the affordable care act that need to go into pricing, so all those things create a very unstable market, cause us to rethink the fundamentals. >> like everything else here, you look a little closer and it's not so simple. divide aetna's billion in costs by its 22 million members, comes out to $45 apiece. so we put this issue to our cnbc global cfo council. 25 chief financial officers representing some of the nation's biggest and most important companies. about half of them responded to our questions. 64% see health care costs per employee rising this year, but a plurality says less than 10% of the increase has anything to do with the affordable care act. indeed, rising premiums at work are nothing new. the kaiser family foundation says over the last ten years, your contribution for health care at work has gone up on
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average 89%, all of that long before obama care. >> it has been happening every year as you and i and anyone who has a corporate plan knows. you're paying higher deductible, more out of pocket, higher monthly bills. >> we don't know what it's going to be across corporate america. a lot of the experts are saying maybe 5% to 7% this year. if that's the case it's relatively in line with last year and actually lower than the average over the last decade. >> scott, thank you very much. scott cohen reporting. we turn to cnbc.com's health care reporter who has been joining us a couple times over the past week, dan mangan has been following the latest. you have a story today where you talk about an executive, e-health i think is the name of the company. >> the ceo of the company. >> he says he can fix the website. why does he believe this? >> he says he can take over the shopping enrollment of the website with the fed gets their act together. he wants to do that. it seems like a viable plan from
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his end. he can handle the capacity. all the other web based proekers could easily handle the capacity. >> what's his nick until this? want to do it pro bone o? >> nos cost to the taxpayer at all. >> the ceo will be on the closing bell. gary lauer, no relation to matt we assume, on at 3:00 p.m. on "closing bell." i'm sure maria and bill will question him about his offer and why he can could this. >> at length. >> one of the things that came up this morning something you talked about and questioned the white house's david simas last week about, how many people have enrolled on the federal websites and how many people have actually purchased health care coverage? miss sebelius earlier today said we don't know because we don't have reliable data. >> that's right. >> what else? >> that's right. that's the key takeaway here. this was a dramatic, every
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report i read on twitter said this was a huge moment for her to acknowledge this. for three weeks or so hhs had denied this was a problem or a serious problem. only last with the glitch guru brought in said this is at the top of our list. she said she can't give you enrollment data because the numbers are so bad. >> some of the states have actually come forward with data, haven't they? >> they have. >> kentucky has. >> kentucky, washington state california, connecticut. they've been issuing data. a lot of that -- a lot of these enrollments are medicaid enrollments which is concerning because they want more people on the regular standard obama care plans. but at least they've been forthcoming about this. a key question which you're implicitly raising there is how good is their data? >> yeah. but when we say the obama care plans, we're talking about the commercial plans sold on the government organized exchanges. >> not medicaid coverage. >> you can be qualified for
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medicaid coverage, expanded coverage in the obama care exchanges, but the key number here what she's being asked about is the qualified health plans, the private insurance plans, that are being sold. >> dan, thank you very much. >> thank you. >> we'll be back with you soon i'm sure. >> thanks, ty. as the white house scrambles to try to fix all the health care problems, young americans are coming to terms with how obama care will impact them and some are getting kind of worried. one of them with us right now. katie is a free lance graphic designer in new york. her annual health care expenses would go up more than three times under obama care. >> nice to meet you, sue. >> you did not have health care coverage before. >> no. >> your annual costs came out to about $650 a year. >> correct. >> using walk-in clinics and things like that. >> correct. >> when you priced out the new affordable health care plans affordable to you, you were paying about 650, what were you going to be paying under obama care? >> i was going to be paying between $2400 to $2800. i don't know what co-pays are
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going to be under the health care. right now i tune up shop for $109 per visit. if i go to the doctor once in a year i'm only paying $109. at most if i'm having a sick year, it's 650. >> what are you going to do? you're going to be mandated to buy health insurance? >> i guess i'm going to have to cut back expenses. my budget is already maxed out as tight as it can be right now and i don't spend money on anything else. i don't really have much disposable income as it is. so i guess i don't know, i have to cut my gym membership, my healthy eating, the things that keep me out of the hospital to begin with. >> yeah. were you surprised? i mean what were your expectations when you heard about the plan and when you decided you needed to go look at the plans that were available? >> my expectation was fear to begin with because i have worked out a high risk/high yooelds health care system that works for me. being mandated to pay, at least i was hoping for something, better coverage than what i am
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getting on my own right now. looks like is, i will be paying for a service that i may never reap the benefits of in a year. >> because you're young and healthy. >> i'm young and healthy. and if i actually do, i may be paying co-pays on top of that. for $2400 i should have all the free nice beautiful health care i possibly could because if i was paying $2400, i would have a beautiful health care program for myself. >> good luck with it. keep us posted. thank you very much. katie irwin. looks like americans are kind of divided about whether the problems with the federal health care website are a short-term issue that can be solved or whether they are a long-term issue. according to an nbc news/"wall street journal" poll 37% say the website problems are a short term and can be fixed. 31% believe they are longer term issues that cannot be corrected, another 30% say it's too soon to say. much more on this latest poll on cnbc.com and at 6:30 eastern
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time, and tonight on the kudlow report at 7:00 p.m. eastern time. >> dominic chu joins us with a market flash. >> check out what's happened to coleman cable spiking midday after a reuters report that the wire manufacturer was considering putting it itself up for sale. this illinois-based company has roughly $90 million in yearly earnings before interest, taxes, basically profits if you want to put it that way. it's valued around 8.5 times earnings on the potential sale or more than $750 million. so those coleman cable shares spiking here in the market session so far. >> thank you very much. the dow and s&p 500 record highs. nasdaq fresh 13-year high. where can you find opportunity right now at these prices? we've got almost a trillion dollars worth of investment advice for you. that's what this guy supervises. boeing, nike, american express the three big winners in the dow this year. how to play those favorite
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welcome back to "power lunch." how about a quarter of an hour, we auctioned off the last of the treasure auctions, $29 billion, seven years, most of the information regarding the auction, was rather average. we gave the auction a c-plus. the yield 1.87 which happened to
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be the offer side of the one issue market, 2.66 bid to cover. the last four auctions that looks good. i use ten auction average, deteriorating a bit. only a little bit above the ten auction average of 2.60 suffice it to say probably the lowest yield close back to early june in the seven year among other treasury issues. not bad, back to you. >> rick, thank you very much. we are down just a little bit today for equities, but the dow and s&p are still hovering near record highs as investors wait for the fed decision on interest rates in about an hour from now. is there room for the market to move higher? will uncertainty about the fed or easy money and fallout from washington's policies hurt this rally? we welcome back richard madigan, jpmorgan private back, $935 billion under management with sue at the new york stock exchange ben willis with albert freed and company. sue, i'll start by asking richard a question, do you think
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the market, given the sogginess of the economy, given the fact that corporate profits are okay, but not great, is the market in the u.s. overpriced, fully priced, what? >> the cute answer would be fairly valued. the debate ends up being where do we go from here? i think we go higher. you look at a market environment where earnings are fine, we're stable, we think we'll hit 109, 110 bucks the is year. top line growth hasn't. we saw a little revenue growth which is good and the pushback on the macro it's not surprised it's bad. it will be bad through the end of the year. >> higher but not that much higher, i'm sensing you saying? we've been up 24% this year. we were up, what, 16, 17% last year. >> it's been multiple driven so 80% of returns this year have been a function of rerating of multiples. the question is, at a 15 times 14.5 times forward pe right now, do you think we're worth 15.5 or 16 next year? and then what are you playing on
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in earnings? people talking about an 1850 to 1950 s&p target are basically taking bottom up analysts outlook next year, 120 bucks, and slapping 16 plus on the multiple. >> richard, you were talking europe before europe was cool. >> yes. >> i hear more people talking europe these days. for 2014, do you think strategic investors should look at europe very closely and do you think european stocks as a group plight outperform u.s.? >> the outperformance i'm unsure of and i think the debate for people looking at europe will be trying to see whether europe repeats what the u.s. did this year next year. europe isn't cheap. there's a lot of policy debate and issues going on right now. we've been investing there because we think there's a tremendous degree of operating leverage embedded in corporations and we think earnings growth actually grows next year. i'm not bullish on the amount of growth. we are very constructive on the outlook that will go from a negative 1% growth to a positive 1% economic growth. negative earnings growth to
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positive earnings growth. that could be 6 to 10%. >> that could be nice for european stocks. sue, down to you. >> ben, you were nodding your head in agreement with a lot of what richard said and i saw in my notes this morning that basically you feel as though you need to hedge some of those long positions that you have in the market right now? >> i am very nervous about the trajectory of this market. we've continued to close on new highs day after day and that is a little disconcerting. some of the internals we're looking at albert freed make us a little cautious in the fact that the skew on the put call ratios, seems to be exuberance in the option market -- >> and the margin buying. >> the margin buying, today the russell 2,000 which led this market higher is down 1%. pretty dramatically drop in one day for the russell 2,000. that's telling us something. we've had a great bull run. we're up 24% in a year's time. we've done it without being hooked by the horns of the bull. i'm a little bit more careful right now. i'm concerned. i'm not saying that the bull market is over.
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i'm not saying equities are not the right place to be, but i'm not starting any new positions until i see more of a correction. >> richard, what's your best investment advice right now on a global basis for an investor who has a longer term time horizon. >> bigger debate over the next year, not the next month, sue. stocks still win. the upside debate on how much we deserve next year is a function of the multiple dynamic. for people who have really focused on u.s. investments looking outside the u.s. for the first time in a couple years. >> richard, let me sort of go in a direction that may be sort of unanticipated. there's been a lot of talk about spying. >> yes. >> globally. >> yep. >> i've heard it happens. >> you've heard it happens. >> yes. >> is there an argument or a possibility that some contracts that might have gone to american companies, to the big multinationals, to ge, to ibm, maybe to boeing, might go elsewhere because buyers are
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suspicious that those american companies might be sharing information with whom ever? >> cruel but fair and i'll reverse it a little bit on you. the big debate right now is the surprise from some of our allies in terms of the amount of espionage that goes on at a political basis. i've been more surprised that we haven't heard out of say germany or france their concern on industrial espionage, out of china. so there could always be an influence in terms of the contracts around it, but i think people are cherrypicking how they want to make the debate about what is or is not good or bad espionage. i think we win the contracts in what we provide. the u.s. industry leads. you still invest for the right reasons. even if you're buying a contract if ge has the best on sale you invest with ge. >> richard, thank you very much. >> thank you. >> sue? >> all right. ben, thank you too. >> thank you. pleasure. >> all right. you guys are so darn smart. power rundown time. the dow continues to hit new highs. we're taking a look at top three
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stocks in the dow. they are boeing, nike and american express. all up significantly this year. question is, at these levels do you buy, sell or hold these winners? cnbc contributors jeff kilburg and jim iuorio are at the floor or on the floor at the cme in chicago. welcome. let's start out, jim, with you and what do you do with boeing? >> well, if i'm not in boeing, if i see it settle above 131.45 which technically it rallied hard last week, it's consolidated, it shows additional strength to me technically looks like it's going higher. as far as the fundamental analysis goes, i use that to back up the technicals, the market likes a 400 billion backlog of orders. to me boeing looks okay. >> i don't know, sue, the only thing that's scarier buying up here, is maybe jimmy's little bo-peep costume he's going to wear for halloween tomorrow. i like buying boeing. i want to buy it lower. they still have glitches in their dreamliner scenario, but
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potential $87 billion order. 100 day moving average, i'm a big buyer there. >> move on to nike, jeff, you go first this time. >> nike, it's a great addition to your portfolio if it's not already in. phenomenal, nearly 50% year to date. i like the focus over the competitors, under armor, lululemon. they're talking about $36 billion in sales by the year 2017. that's a 40% spike from 2013. so i want to buy it again, lower. >> sue, here's where i give jeff the kathleen sebelius type beat down and here's what it is, is that nike, no, it's rallied almost 70% in this last run up. essentially at the end of the day it's a fashion company that's priced in a heck of lot of good. >> i said buy it lower. >> you said buy it is what i heard. anyway, i think that nike is probably priced in a lot of good news. it's tied with global gdp. if you think there's problems out of perhaps europe or asia it's not time to be in nike. it's priced in a lot of good news. >> a smack down in chicago.
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finish up with american express. jim, you first. >> you know, i like american express. american expression financial companies do relatively well in low rate environments and that's what we're going to have going forward. they say the taper, october, is it march, april, doesn't matter. the taper is off in the distance meaning rates are staying low. also in electronic payments are becoming bigger and american express seems to have a significant part of that. i like american express. >> i have to agree. it kills me, i have to agree here. american express they lead in global travel services. they issue their own cards. they've had a fantastic run here. but i want to be a buyer lower. actual way to get in is sell puts as an option strategy, puts to the strategy. i like being a buyer. >> on that note, gentlemen, go have a cocktail and make you. >> we always do. >> yeah. i figure you did. all right. dom, take it away. >> sue, shares of small cap pharmaceutical company merimack are plummets after the developer said a potential treatment for
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an advantaged form of ovarian cancer missed a mid-stage goal compared to patients who didn't receive the drug. the stock trading at four times its daily average volume. on the move down. >> bill gates, america's richest man. do you know who the richest person in your state is? plus -- >> coming up, our halloween edition of power pitch. is this start-up a trick-or-treat? we have a company trying to take a bite out of the cappedy competition by unjunking junk food. does it have what it takes to be a sweet success? stay tuned to find out.
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literally. nik nicky and adam are cofunders of kanzy company unreal. nicky started the company when he was 13. he teamed up with chef adam who has worked all over the world including the free style restaurant and this is their power pitch. >> i started when i was 13. after a fight with my dad about halloween candy. i didn't understand why candy and my favorite foods had to be bad for me why they contained loads of sugar. i wanted to know if i took the junk out if it tasted better. i teamed up with adam and we founded unreal a company with a mission of unjunking junk food. we started with candy, moved the junk and added ingredients, reduced the sugar, added nutrition and made it taste better. >> people have come to accept to have great tasting candy you
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need junk. we've given you a junk free alternative. similar prices. at the end of the year available at 20,000 stores nationwide including target. we've secured if funding and partnered with people such as bill gates, jack dorsey and leonardo dicaprio who believe in our mission to unjunk the world. plenty of other food categories to unjunk that sn. >> they're on the right side of our screen. on our panel, patrick cheng, venture capitalist of nea and harvard university's experiment fund which cedes college student starups and curtis stone author of five cookbooks including his latest what's for dinner. let's huddle up. curtis, go first. >> i think any time you take an existing category and you make it a little healthier, more natural and you're removing some of the gmos and hydro nated oils
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and all the stuff that we consider junk, i think it's a really exciting idea. >> patrick? >> empty calories from added sugars and solid fats account for 40% of all calories consumed by children nowadays. this is the first generation that may not live as long as their parents. so my question is, is this a healthy candy. >> yeah. i think that's an excellent question. we want something that's delicious and nutritious but how will they muscle in when there are so many other players? thank you so much for joining us once again. in the hot seat right now. we have two hot seats for you. we're now going to ask you a few questions. first i would like to throw it to you, patrick. >> what do your margins look like compared to your competitors and how can you maintain competitives pricing? >> we've multiple with different ingredient suppliers, manufacturers to give us what we need and they're partnering with us for the long term. >> you're calling it unreal candy up junked and what research you've done on your
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target customer? to me that sounds cryptic. >> people are seeking out better for you alternatives. we've coined this unjunked. unjunked basically means it's made as if you would be making it yourself. >> how much have you had to spend on marketing? i would imagine to get your name out there an saturate the market with one bang you had to spend a lot of mun. >> marketing is not something you can put a price tag on. it's really a brand building exercise. we're never going to outspend our competitors. david versus goliath. we are david. >> how committed are you to the business? you're only 16 and how will you take over a market that's dominated by two extremely strong incumbents, hershey's and mars? >> i'm very committed to this company. i love it. it's in my heart. i do as much as i can. i have to remain in school, so it's a very solid balance between company work and school work. >> nicky, i want to know where you're at in the point and how you're performing? >> we set goals for ourselves at the beginning an we made mistakes, but we've made a bunch
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of successes. the goals that we've set i believe we've made most of them and just fulfilling new ones. >> it tastes less sweet and i know it's got things in here that are better for me. does it have fewer calories? >> we do have less calories but we were never focused on calories. fat has more calories than sugar and the good fat and protein are worth making that. >> you're focusing on nutrition as opposed to the it is less fat. >> the sugar is public enemy number one and we've focused hard on sugar. reduced the sugar by 40%. >> okay. . folks, you've heard what nicky and adam had to say. we need to know whether or not you are in or out on unreal. patrick, you first. >> the hunger for healthier alternatives have produced massive investment returns, vitamin water acquired by coca-cola for $1.4 billion, tivan by starbucks for $620 million. i think unreal is hitting obesity in the gut targeting candy, i love it, i'm in.
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>> curtis, what about you? >> i think it's a little too clev foreits own good. i wish you called it something else. for that reason, i'm skeptical about the success of it long term. however, i really believe in the category and i believe in what you're doing so i'm in. >> i like the fact that it's delicious and moving ever closer to nature. i have to say i am in. and i'm going to have another one straight after this segment. we've got three ins. how do you feel? >> fantastic. >> what's your reaction? >> we're going to do it together, right? not just one of us. it's a whole team. it's going to be everybody. >> best of luck and we're looking forward to seeing what is next in your innovation pipeline. >> thanks to nicky and adam to unreal and our panelists patrick and curtis. and that, guys, is today's power pitch. >> and i'm in. i tasted the candy, these are the peanut covered with sweet, little less sweet as mandy said, they're very good. i liked it. maybe i will give some out tomorrow to the trick-or-treaters.
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we would like to hear from you, in or out on unreal? logon to power pitch.cnbc.com or go on twitter and tweet with the #powerpitch. >> only guy i know who can eat and talk on tv at the same time and do it gracefully. all right. linkedin shares on a tear this year, but right now, the company's getting hit hard. it's down 8.3%. its outlook disappoints. julia boorstin spoke with the ceo. the richest person in your state. we're going to name some names, some are surprising. we're back in a minute. [ male announcer ] what if a small company became big business overnight? ♪ like, really big...
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linkedin beating wall street estimates for its third quarter but the revenue outlook for the current quarter fell below expectations and as you can see shares of the social networking company are now down 8.3%. that's just off the lows of the day. cnbc's julia boorstin spoke exclusively with the ceo. what did he tell you? >> well, sue, linkedin is bullish about the company's expansion prospects saying that with mobile about to hit a tipping point, projecting 50% of
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the company's visitors will come from mobile next year. he's also looking forward to growth and expansion in china and also from a potentially massive market from part-time jobs. here's what he had to say. >> china has become one of our fastest growing companies as measured by member growth and in terms of the addressable opportunity, it's quite significant. by some measures there's as many as 600 million knowledge workers or professionals in the world. when you include students in china one in four of that addressable opportunity is in the country. part of the longer term vision and development of the economic graph is to digitally represent every economic opportunity in the world, both full-time and temporary and today we have north of 300,000 full-time jobs, largely oriented around high valued professional opportunities. but to realize our vision we have to expand that. there is an increasingly large segment of the work force in the united states that's in part-time jobs and it's not necessarily the intention of those individuals. they're what's called under
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employed, looking for full-time work but only able to find part-time work. that i don't think is going to go away any time soon. i think this is a secular shift in terms of the way the global economy is evolving. >> weiner talking about a long-term vision there. for more on linkedin go to cnbc.com. back over to you. >> thank you very much, julia. more than 7 billion people in the world and there are only 72 apparently who really matter. really? well, "forbes" out with his its new list of the powerful people and we have it for you. ever wondered who's the richest person in your state? we'll shine the spotlight on that when we come back on "power." at least as much as you do. [ male announcer ] join the nearly 7 million investors who think like you do. face time and think time make a difference. at edward jones, it's how we make sense of investing. the ocean gets warmer. face time and think time make a difference. the peruvian anchovy harvest suffers. it raises the price of fishmeal, cattle feed and beef.
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your financial advisor should focus on your long-term goals, not their short-term agenda. [ male announcer ] join the nearly 7 million investors who think like you do. face time and think time make a difference. at edward jones, it's how we make sense of investing. coming up on "street signs," guess what? we are the official fed show here on cnbc. talking about "street signs." and, of course after we got that surprise no show for the taper, there are expectations out there for status quo again today.
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so, will something upset the apple cart? a star crew on board, pimco's bill gross and starting five minutes earlier than normal, 1:55 eastern time. apologies "power lunch" because we'll eat out five minutes of your time. join us top of the hour, 1:55 when it starts. back to you. >> it's worth it, mandy. we'll see you at 2:00. who is the richest person in your state? well, wealth x compiling the list and highlighting five of them. residents were determined by their businesses and their addresses. california's richest person, oracle founder larry ellison with $46.4 billion. texas, michael dell, with $16 billion. florida, mickey arison, the former ceo of carnival with $5.9 billion. new york's richest person, is the mayor, michael bloomberg with $21.4 billion. new jersey's hedge fund manager david tepper with $7.9 billion. to check out the entire list and
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your state, you can do it going to cnbc.com. ty? >> all right, sue. there are more than 7 billion n the planet but 72 actually rule the world according to "forbes" which published its ranking of the world's most powerful politicians, financiers, ceos and billionaires. here is michael nor. who's number one and why? >> number one is a bit of a surprise, it's russian president vladimir putin. and, you know, i think this is -- this list is based on a vote of eight editors across four criterias. complicated how we put it together but reflects a collective wisdom of our editors here. my guess is, that it more what happened to our number two person which is barack obama. this vote was done during the government shutdown and the nsa spying scandal going on and i mean putin is autocratic.
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he doesn't really answer to anybody and he could be in power until 2026. >> obama had been number one in the prior survey. >> yes. >> as you say, there may be some function of when the polling was actually done and also the fact that putin seemingly maybe outflanked the president over syria which happened in september. >> i would guess that has a huge impact. also one of the criteria they use to vote on this list is, how freely people wield their power and putin seems unconstrained. >> let's talk about newcomers and women. how many women are on the list and who are the most noteble? >> there are nine women on the list this year, up i believe from six last year and there were only three on the list are inaugural year and one of those women is a newcomer, janet yellen, the presumptive new chair of the federal reserve. there are also two africans on the list for the first time
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ever, including africa's richest man, $16 billion, akeel degota who made his fortune in cement, but he's using that fortune which is a substantial one in an impoverished place in africa to influence politics. >> we appreciate you being with us. >> thank you. >> the countdown to the fed decision is on and cnbc has it covered as mandy said we're going to share the last five minutes of our show with them. stay tuned. we have a little more. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending.
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we are just minutes away to the fed's decision and we are seconds away from the arrival of senior economic correspondent -- >> she told me it was over there. >> who's been preparing for hours to be right here at this very moment. so sue, we've got steve here, we're ready to talk about the fed. nobody really -- i can't remember a less eagerly awaited fed meeting than this one. compared with the one back in september where we all thought something was going to happen. >> i think this is a holding period here and what we look for
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is hints in the statement whether they're going to flash, talk about it in the next hour, what kind of light they flash for the markets? >> do you think they will? >> i don't think they will. i will point out, i was calculating -- >> oh, yes. >> go back and show a chart since june of the s&p. >> all right. >> we're at 1650, more than 100 points above where they were when the fed was ready to taper on the s&p. something to take into account. and i also wanted to talk about today's data not -- >> cpi data. >> and adp data. the numbers 130 that's been stepping down. look at that in a second. nonfarm payroll estimate 130 as well and september revised down. look at the chart here. the adp numbers. what you see there it doesn't take an economic genius to figure out we have consecutive weakening there, june, july, august, september, october. but there it is, tyler, obvious to see. not getting any closer. 130, tyler, is near a rate where it's not enough payroll growth to keep lowering the unemployment rate. one of the fed's stated goals
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for qe. the cpi chart going the other way. 1.7% year over year the fed wants 2% so we are not getting closer to either objective of the federal reserve. >> there's -- >> green light for more buying of bonds. >> or at least remaining in place right now. >> there's also the disconnect between the way the consumer is feeling and main street is feeling and the exuberance the stock market is feeling. the stock market moving to new record highs almost on a daily basis based on the fact that they're counting on the fed to keep adding its accommodation. main street look at the employment numbers and it's discouraging. >> i think that's right and two things behind it. one is that the market is now convinced of a much longer period of quantitative easing and the second thing is that court profits have been rising at a rate higher than gdp. that means profit margins have remained strong unlike other cycles we've gone up to this lofty level about 12.5%, 12%, corporate profits a percent of gdp and stayed there.
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>> the release time is what? >> 2:00. >> 2:00 sharp. that will do it for this hour. we'll watch the dow, the s&p, they've been basically flat most of the day. we'll see how they react to the fed decision, sue, just minutes away. >> it's interesting, the transports have started a little sell-off. we're down about 47 points. keep your eeye on the transport. the fed decision straight ahead. steve to the other set. "street signs" after a quick break. see you tomorrow. americans take care of business. they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence.
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welcome to "street signs." today we are your official federal reserve show. we are about five minutes away from hearing what the fed will or will not do and because no one thinks they will begin to taper maybe that's a reason to think they will begin to cut back on their bond buying. i am brian sullivan. a big fed day. >> i'm mandy drury, this is where the markets are standing minutes before the fed decision. the dow off by 21 points, the s&p off 5 points both the dow and s&p opened at record highs. treasuries, this is an interest one, yields around three-month lows. the ten-year is quite low.
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2.48%. the expectations are that the fed is going to stick to its current pace of bond purchasing and that is the reason the gold is gaining as well as we speak. it is currently up by about $8. >> let us bring in jpmorgan funds david kelly, jim bianco and steve liesman. what are the odds today will be a buster douglas fed day and shock the world against all odds it will not taper. >> if you take it from the last two meetings the odds are high. i think at least on one level the fed is where it wants to be and that's that 248 on the ten-year note. i don't know about the stock market. if i think about the level of the s&p, for example, at 1750 or so where it is right now, it was at 1650 or so when the fed was ready to taper in june. >> right. >> the question is does the fed have concern as larry fink suggested with the bubble nature of current stock markets, feel a need to take any air out of the
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balloon and we will be watching the statement, a green light, a red light or yellow light for stocks? >> just to remind our viewers here what black rock's larry fink said, the fed's policy or the fed policy contributing to bubble like markets and it is imperative the fed begins to taper its asset program. i would like to though, since then, since september, we've had soft reads on the economy, we've had the shutdown. do you think the economy is strong enough to start doing that 1234. >> the fed looks to have been the a holding pattern. what has happened however, which i think is a little more worrisome, the extent to which the market has extended its belief in qe. as you said at the top of the show, our fed surveys shows april 2014 when the taper begins, from november where it was, and continues to taper, i'm going to put money into the jaw, don't you worry, continues to taper through qe through all of 2014. i don't know if the market is too irrationally exuberant about qe next year. >> david kelly, do you agree
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with larry fink, are stocks in a bubble? >> i don't think stocks are in a bubble but i think we will end up with asset bubbles if the federal reserve maintains this excessively easy monetary policy through 2014, 2015 into 2016. we're asking for asset bubbles if we keep liquidity this available in a recovery -- >> why is now, david, not a bubble, but in a year or so it may be? what's different? >> because from a valuation perspective. if you look at the measure i look at the most something called real core earnings, look at the earning yielding stocks, subtract out core inflation. put inflation into the mix, pe ratios, the market still isn't expensive at these levels. it's not cheap and it will get expensive if people have no way of making good money on long-term bonds or short term cash. that's going to pour money into the stock market and cause a bubble there, may cause a bubble in housing at some stage. >> at the last meeting when with us, david, you said it was a wimpy decision to not taper. jim, i would like to bring you
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in. what would you like the fed to do and what do you think the fed will do? >> well, what i would like to see them do is what we've referred to as the jeremy stein argument. jeremy stein one of the fed governors, harvard professor, expert in financial markets and arguing the fed has to be very careful about the reaction in financial markets and whether or not they're going to foster a bubble or not foster a bubble. the september 18th meeting it seems like what the fed decided was that jeremy stein argts doesn't hold any weight. they're about data dependency, the unemployment rate, they're all about the payroll report, they're all about inflation and gdp and not about whether or not there's an inflation or an asset bubble going on. i'd like to see them bring that argument back and talk about the reaction in the financial markets and not just say that they're ignoring it and just looking at the unemployment rate and gdp to make their decision when to taper. >> all right. we're about ready to get that decision so i want to give you the update. the dow down 28 points right now, the ten-year treasury yield
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at about 2.49%. we are waiting from hampton and to our loyal viewers, everybody that says the "t" word owes a dollar, steve, two bucks in, i have a feeling this jar will be filled by the end of the show especially if the federal reserve does shock the world. let's go to hampton pearson in washington, d.c. >> the federal open market committee decided to continue the purchase of additional mortgage backed securities at a pace of 40 billion per month and long-term treasuries at $45 billion per month. the committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases. on the economy, information received since the last meeting in september suggests economic activity has continued to expand at a moderate pace indicators of labor market conditions have shown further improvement but the unemployment rate remains elevated. available data suggests household spending and business fixed income while the recovery of the housing sector slowed

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